Icy Company makes two products from a common input. Joint processing costs up to the split-off point total $42,000 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: Product XProduct YTotalAllocated joint processing costs224001960042000Sales value at split-off point32,00028,00060,000Costs of further processing1160025,30036,900Sales value after further processing 40,800 54,200 95,000Required:a) What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point? b) What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point? c) What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point?d) What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point?

Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Answered: Icy Company makes two products from a…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 10CE: A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each...

See similar textbooks

Related questions

Question

Icy Company makes two products from a common input. Joint processing costs up to the split-off point total $42,000 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below:
	Product X	Product Y	Total
Allocated joint processing costs	22400	19600	42000
Sales value at split-off point	32,000	28,000	60,000
Costs of further processing	11600	25,300	36,900

Sales value after further processing 40,800 54,200 95,000

Required:

a) What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point?
b) What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point?
c) What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point?
d) What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point?

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Decision to Sell before or after additional processing

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions